Will Trump’s tariffs push up commodity prices? Wells Fargo thinks not

U.S. President Trump may have imposed harsh tariffs on steel and aluminum, albeit with exceptions, but Wells Fargo Investment Institute said that didn’t change its bearish view on commodity prices.

“Over the long term, it is exceedingly difficult for one country to influence global commodity prices. Other factors, such as the commodity price super-cycles, often are more dominant,” Wells Fargo said in a note dated Monday.

It noted it did expect steel and aluminum prices to rise this year and possibly next year. But it added that while steel prices rose the last time the U.S. imposed tariffs in the industry in 2002, the segment was also boosted by a then-new commodity bull super-cycle, which boosted both industrial and other commodities nearly across the board.

Wells Fargo said it expected another five years of the current commodity bear super-cycle, which it said has already lasted seven years. It pointed to most commodity markets remaining “swamped” by too much supply.

“The bottom line is that our commodity views, both in the short and long term, have not changed with recent U.S. tariff talk,” Wells Fargo said. “We remain bearish in the short term and neutral/bearish in the long term on the commodity complex.”